SENSEX NIFTY
Sep 11, 2012, 01.31 PM IST | Source: CNBC-TV18

Nifty may breach 5450 in Sept series: Angel Broking

The Indian market has been rangebound for a long time now. In an interview to CNBC-TV18, Siddharth Bhamre of Angel Broking says the Nifty may breach the resistance level of 5,450 in the September series. "You should continue to hold on to your long positions and buy on dips," he adds.

Siddharth Bhamre

Head- Derivatives, Angel Broking

Expertise : F&O

More about the Expert...

The Indian market has been rangebound for a long time now. In an interview to CNBC-TV18, Siddharth Bhamre of Angel Broking says the Nifty may breach the resistance level of 5,450 in the September series. "You should continue to hold on to your long positions and buy on dips," he adds.

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Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Sonia Shenoy.

Q: How you should be approaching the Nifty, after the sell-off that we saw last night?

A: I do not think that should be called as a sell-off. It has been quite a subdued session with slight negative bias. The liquidity, which is coming, has been encouraging. Last Tuesday, we were pointing out that how the liquidity parameters like euro versus dollar, US bond yields, crude oil price movement were supporting that the long unwinding, which was seen by FIIs, may not continue for long.

There is a dilemma between two options. First, you are seeing slowdown in China, you are seeing unemployment number in US rising, you are seeing slowdown in US, recession in Europe, and other developed countries like Australia are also seeing a slowdown. But instead of reacting negative to this news, the market is staying where it is. We are seeing FIIs buying. Reason for this is most of the participants are thinking because things are not working out, there would be a stimulus. That is the reason you are seeing that liquidity is coming into all the emerging markets where growth rate is still there.

If I look at our internals of derivatives, FIIs yesterday have unwounded 7-8% of their index futures position. That is slightly bothering though it is not a signal where we would go and initiate short positions. You might see a correction. That might be not more than 50-60-70 odd points. So, do you go short on this correction? The answer to that is no, if you are a positional trader.

The market remains buy on dips market. If you are an intraday trader or you are bearish then you can think of buying 5,300 Put options for a day or two, but not beyond that. At the same time, if I look at the options data, strike price of 5,600 and now 5,700 is also getting active. That indicates that probably market may think of going towards those levels. So, we believe that in September series you might see the breach of that important resistance level of 5,450. You should continue to hold on to your long positions and buy on dips.

Q: You have a sell call on Infosys today.

A: We are not very optimistic on the stock. Rs 2,450-2,500 was a strong resistance. It has closed marginally above those levels. The entire rally from Rs 2,100 levels to current levels was mainly because of short covering. In between, around Rs 2,350, we did see some long positions.

We believe that the stock is light now. You might see fresh shorting happening at higher levels. So, at current levels, one can go short. We are expecting the stock to correct till Rs 2,380. You can probably fix a stop of Rs 2,548 and go short on Infosys.

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